CANADA GRAPPLES ON THE BORDER The emerging trend towards trans-border M&As has regulators everywhere concerned about their wide implications. While others ponder future difficulties, policing off-shore trading is already an everyday concern for the Ontario Securities Commission (OSC).
"Trans-border markets are the most significatn focus of securities regulations today," commented OSC chairman Stanley Beck. "The Toronto Stock Exchange, like US exchanges, has had real problems tracking down insider trading when it takes place offshore."
The buoyant Canadian M&A scene features a high degree of US trading in Canadian stocks. One hundred and ten companies listed on the Toronto Stock Exchange (TSE) are now interlisted on US markets, up from 84 in 1981. Of this total--which includes over half of two dozen major Canadian companies and accounts for 40% of TSE volume -- 24 are listed on the NYSE, 35 on the Amex, and 51 on NASDAQ.
Concerned about possible offshore insider trading, the OSC undertook a dramatic extra-territorial extension of Ontario law during the recent C$2.4 billion acquisition of Genstar Corp of Vancouver by Imasco Ltd of Montreal.
Genstar had become an attractive property last summer by acquiring 99% of profitable Canada Trusto Mortgage Co -- the country's largest trust obtained an OSC ruling allowing it to resume trading as well.